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Some Bolivians are torn between Morales & free trade

Terry Wade, Jan 14, 2008

El Alto, Bolivia (Reuters) - Damiana Katari, who knits clothes for a living and wears long black braids, a bowler hat and layers of colored skirts, proudly voted to elect fellow Aymara Indian Evo Morales to the presidency of Bolivia.

But when the subject turns to Morales' trade policies, she tenses up, worried that her workshop for knitting wool in the Andean highlands will be hurt by his trade policies.

Katari, 54, and other artisans in the bleak city of El Alto, which overlooks the capital of La Paz, fear Morales' reluctance to forge free trade deals will threaten sales of their products overseas and perhaps their jobs.

"Artisans don't support the trade policy of Evo Morales. Where are we going to sell our products? You always have to work to open up markets," said Katari, who has earned her living for the last 15 years by exporting clothes worldwide.

While other countries in the region have signed free-trade agreements with the United States, Europe and Asia, Morales has not, fearing foreign companies might undermine local industry.

That has put Morales at odds with people like Katari, who said she otherwise supports the leftist president.

Frustrated by the business climate under Morales, exporters say some companies could relocate to neighboring Chile or Peru, which have free-trade pacts with the United States.

"Bolivia's trade performance has been impeded by the government, which has a strong ideological stance that is opposed to globalization and free-trade," said Eduardo Bracamonte, head of Bolivia's export group and owner of a jewelry factory in La Paz. "Chile and Peru are offering themselves as alternatives."

Trade preferences Bolivia has received from the United States since 1991, which allow many Bolivian goods to enter the U.S. market duty-free, could be challenged when they come up for renewal next month.

Caught in the middle

Morales has become a harsh critic of Washington. This month, he accused U.S. conservatives of conspiring with Bolivia's opposition to halt his overhaul of the constitution.

Some members of the U.S. Congress want to scrap the preferences unless Bolivia agrees to work on a broad, two-way trade pact. Others say ending the preferences would risk isolating Bolivia and push it closer to Cuba and Venezuela.

A Bolivian trade official was unavailable for comment.

Caught in the middle of the political debate are Bolivians whose livelihoods depend on exports. If local companies that employ artisans move to Peru, ordinary Bolivians could lose their jobs.

About 80,000 Bolivian workers export $412 million worth of goods like knit clothes, wooden furniture, and jewelry to the United States annually, exporters say.

Some of the jobs linked to the United States pay well. Hundreds of women in El Alto have left textile factories to work at home knitting clothes from traditional fibers like alpaca and llama, which bring in more money.

Andes Gifts, a California-based company, buys garments from 400 knitters in El Alto and pays them up to $300 a month, about three times what most people earn.

Nick Terlecky of Andes Gifts says U.S. trade preferences have helped the sale of such "fair-trade" products, which Bolivia's government has applauded for lifting local wages.

"The money is good and there is a lot of demand for what we make," said Martha Monrroy, 24, who leads a team of 10 women who knit clothes for sale in the United States.